USD Trading Outlook
AUD/USD Europe lifted the pair after it failed to make headway below 0.8760. The profit taking rise had the pair near 0.8795 as NY got going. Early NY saw the pair spike down to 0.8759 on the headline GDP miss. No further losses were possible though after the market realized the GDP internals weren't that impressive. Upon that realization US yields and the USD slipped from their highs. AUD/USD quickly recovered its footings and rallied back above the 200-HMA. A period of consolidation near that MA ensued and it eventually resolved higher. US equity markets and JPY was sold on talk of a Nikkei report on the GPIF reallocating investments. AUD/USD lifted to a 0.8841 high as AUD/JPY ran up near 96.65/70. Little pullback was seen for either pair and late in the day they both sat just below the session's high. Aussie Q3 PPI, the BoJ meeting and EZ CPI are the main risks overnight. Technically it appears further gains can be made after the pair bounced off s-t trend line supt, is back above the 10 & 21-DMAs while RSIs are biased up.
AUD/USD Europe pushed the pair higher as JPY cross buys persisted and the market was leaning towards a dovish Fed outcome. AUD lifted from the 0.8860 area and sat near 0.8880 as NY got going. NY kept the bull pressure on as risk was elevated. AUD/JPY's lift continued towards 96.25 and equity markets rallied early to aid AUD/USD's rise. A broad based bout of USD sales post-option expiries saw the pair spike higher, run stops above 0.8900 and hit a 0.8912 high. Action then settled and the pair drifted lower as the Fed neared. The pair sat near 0.8885 as the Fed hit the wires. The message was not as dovish as hoped. US yield rocketed higher as did the USD. In no time AUD/USD dived to a 0.8780 low. Some give back in the USD rally saw the pair bounce and it sat near the 200-hour MA late in the day. Downside risks emerge as daily RSI diverged on the new s-t high, spreads narrow and the 10 & 21-DMAs are threatened. There is little data overnight so a further unwind by recent longs might persist.
AUD/USD JPY cross buys begun in Asia carried over in Europe's morning. This pushed AUD/USD up from the 0.8820 area towards 0.8840 into NY's open. Early NY saw leveraged names continue to buy AUD/JPY & keep AUD/USD bid into US data. The big miss on durable goods saw the USD part of the equation take over the lift. US yields and the USD spiraled lower post-data. AUD/USD spiked up, cleared Asian offers at 0.8840/50, ran stops above 0.8860 and hit a 0.8882 high. The USD and yields rebounded after consumer confidence was well above expectations. AUD/USD dipped back to the 0.8840 level but couldn't break lower. AUD/JPY rallied in NY's afternoon and neared 95.75. This combined with rallies in US equity markets had AUD/USD sit just above 0.8860 late in the day. Action overnight may be limited as traders are likely to keep their powder dry ahead of the Fed. Should the Fed lean dovish tomorrow we might see AUD/USD break 0.8900. If that occurs it's possible a s-t bottom is in place and run towards 0.9100 may take hold.
AUD/USD traders continue to show lack of conviction as AUD gets more attention on the crosses. AUD/USD held to basically a 0.8790/0.8820 range for Europe & NY. With AUD bid vs. EUR & USD while being offered vs. NZD & JPY traders feel it's best to not get overly aggressive taking AUD/USD views. Lack of premier Oz data is also a factor keeping the ranges tight. Tomorrow may see some activity as US data ramps up with Sep durable good and Oct consumer confidence. Then the Fed meeting on Wed is the next big risk. Until then AUD/USD likely sticks to the 0.8720/0.8860 range for now. A break of the broader 0.8640/0.8900 range is likely needed to really wake up the AUD/USD market
AUD/USD Short covering persisted in Europe's morning after the break of s-t trend-line support during Asia saw limited follow through. Europe lifted AUD/USD from 0.8750 & had it near 0.8780 as NY got going. AUD buying remained the theme in NY as risk was generally buoyant and AUD crosses remained bid. AUD/JPY lifted from 94.75 towards 95.25 while EUR/AUD slide from the 1.4420 area down near 1.4365. This allowed AUD/USD to rally from NY's open to a high of 0.8824. A brief bout of road based USD buying dipped AUD/USD back near 0.8795 but the pair regained its composure. It bounced and sat just above 0.8810 late in the day. The broad 0.8640-0.8900 range remains intact as does the l-t bear trend but some squeeze risk is extant. The pair has recently been trading within a symmetrical triangle. The bottom was pierced in Asia but it was a false break. Now the pair looks poised to make a break of the triangle top. If that occurs recent shorts may cover and a 0.8900 test may be due. Should 0.8900 break a bigger squeeze may be due as it indicates s-t bottom may be in place.
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